FDI: Relaxation in rules for foreign direct investment in the construction sector. Some of these relaxed rules include reducing minimum built-up area and capital requirement for the projects receiving FDIRead our full coverage on Union Budget

The Real Estate (Regulation and Development) Bill, 2011: Yet to receive clearance from the Cabinet, it proposes to promote transparency and accountability. The Cabinet is deliberating on revising the Bill and having a regulator for the real estate sector..

Key issues

Opaque regulatory regime

Tight leash on bank funding

Variation in stamp duty levied by various states

Lack of clear land titles, absence of title insurance and procedural difficulties in obtaining clear land titles

Little progress on plan to revive SEZs

Outlook
According to 'Emerging Trends in Real Estate Asia Pacific 2015', jointly published by PwC and Urban Land Institute, there has been a change in sentiment of investors, both domestic and international, after a new dispensation took charge at the Centre last year. The growing confidence is likely to create an upturn in demand for Indian real estate.

"Given the govt's targets for smart cities and affordable housing... there is a case for giving infra status to the segment. If developers get priority-sector lending rates, they will be incentivised to take projects for civic amenities like roads, waste management, electricity and water connections. To boost demand, the deduction for interest on housing loans should be increased from Rs 2 lakh to Rs 3 lakh a year"Brotin BanerjeeMD & CEO Tata Housing

What are the expectations for the real estate sector?
- Krishnakanth Madamshetti

While there are a lot of expectations on direct tax sops for the real estate sector, at the very least, we expect certain clarification on the taxation regime for Reits, to eliminate hurdles in implementation of the structure and provide parity of taxation regime between various investments on Indian listed platforms. As expressed in the previous Budget, to revive interest in special economic zones, the government could reinstate the minimum alternate tax (MAT) exemption provided to SEZ developers and units. Exemption from levy of dividend distribution tax (DDT) could also be reinstated for SEZ developers. Further, certain measures to make liquidity available to the sector are also expected.

What could be the Budget allocation for the mission of 'houses for all by 2022'? Will the Budget benefit the real estate sector?
- Bharath Chandra

In the previous Budget, the government had allocated Rs 4,000 crore by way of cheaper credit for affordable housing for the urban poor/economically weaker sections/low-income groups, and about Rs 7,000 crore for the smart cities initiative. While it is difficult to estimate the exact Budget allocation for the coming year, it is expected certain fiscal stimulus or incentive will be provided to make the mission a reality. We expect some announcements to kick-start development of smart cities.

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